SNOW HILL – The Ocean Pines Association is seeking dismissal of a lawsuit filed regarding its failure to hold a referendum.
On Jan. 10, attorneys for the Ocean Pines Association (OPA) filed a motion to dismiss the lawsuit initiated by resident Slobodan Trendic. The legal case was filed against OPA and its board members in November after the association declared Trendic’s petition for a community referendum invalid. In the court documents filed last Friday, OPA attorney Jennifer Jackman said the association had the authority to reject the petition for referendum and did so with an attorney’s advice.
“Plaintiff provides no facts that would suggest anything other than the fact that the OPA reasonably relied on legal counsel’s advice and rejected the petition, as it has the authority to do pursuant to the association’s bylaws,” court documents state.
Trendic, a Pines resident and former board member, and volunteers with START (Strategic planning, Transparency, Accountability, Respect, Trust) collected more than 800 signatures on a petition to lower the board’s spending authority. When the petition was submitted in August, however, OPA’s legal counsel determined that while the petition had sufficient signatures to trigger a referendum, it was invalid because of its wording.
The question on the petition read “Should OPA Bylaws Section 5.13.(d)(1) be amended to read ‘if the total estimated cost, capitalized in accordance with generally accepted accounting principles, of any single capital expenditure exceeds One Million Dollars the proposed single capital expenditure SHALL require approval of the members by a referendum?”
Jeremy Tucker, the association’s legal counsel, objected to the use of the word “should” in the petition.
Trendic’s attorney, Bruce Bright, subsequently filed a complaint for declaratory and injunctive relief in Worcester County Circuit Court. Bright argued that Trendic’s petition met all of the necessary requirements.
“The purported ‘legal analysis’ of Tucker as adopted by the OPA board based on the use of the word ‘should’ in the petition is patently unfounded and, upon information and belief, is contrived to achieve the board’s desired (but improper) objective, which is to avoid a referendum vote on the question presented,” Bright’s complaint read.
The response filed Friday by Jackman cites the business judgment rule, which is the presumption that directors acted on an informed basis and in good faith.
“The OPA Board sought advice from legal counsel as to the validity of plaintiff’s petitions, and the OPA Board relied on legal counsel’s advice when deciding to reject plaintiff’s petitions, further substantiating the fact that the board acted consistent with the appropriate standard of care and in good faith,” court documents state. “As such, this court should not interfere in the internal affairs of the association, absent a showing of fraud, bad faith, or self-dealing, which has not been alleged.”
Jackman’s response states that the fact that the plaintiff does not agree with the opinion of OPA’s legal counsel does not “effect the applicability of the business judgement rule.” The response also objects to the inclusion of the seven board members as defendants in the case.
“…as corporate officers of a homeowners association, the OPA Board members are immune from suit unless they engaged in bad faith, exceeded the scope of their authorities or were grossly negligent — none of which apply in this case,” documents read.
